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How to Automate Your Finances

2 min read • May 14, 2019
30 sec brief

There are different ways to automate your finances that are easy to sign up for, and are provided free of fees. Technology provides a powerful hack that can help you get on track, and more importantly, stay on track.

You can have the best of financial intentions, but as you likely know from personal experience, life often makes it hard to follow through on your well-intentioned financial goals. That’s not a weakness of failing. It’s basically just a cost of being human. The academic field of behavioral finance has documented a laundry list of psychological biases that make it hard to act in our long-term financial best interests.

Technology provides a powerful hack that can help you get on track, and more importantly, stay on track. There are different ways to automate your finances that are easy to sign up for, and are provided free of fees.

Say yes to the workplace retirement plan. One of the most powerful features of participating in a 401(k) is that your contributions are automatically deducted from every paycheck and sent to your retirement account.

Create your own automated retirement plan. Everyone with earned income is eligible to contribute to an Individual Retirement Account (IRA). All the low-cost discount brokerages offer IRAs, and when you sign up you get to choose how you want to “fund” your account. For absolutely free the brokerage you use will be happy to help you set up a recurring automatic transfer from a bank account into your IRA. The transfer can be monthly, quarterly, or whenever you want. Your bank will not charge you for the transfer either.

Put your emergency fund on autopilot. The same concept works with building a solid emergency savings fund. If you have a bank checking account, you can easily set up a direct transfer –again, it can be weekly, monthly or quarterly –to a separate savings account. To earn the highest possible yields, check out online savings banks. They tend to pay a much better interest rate on savings accounts than the brick-and-mortar banks downtown.

Auto-pay your credit card and loan payments, and utility bills.  Not only does this save you time, but it can also help you build strong credit scores. One of the biggest factors in your credit score is your track record in making on-time payments for credit card bills and loans such as the car payment or mortgage. Auto bill pay ensures that you don’t slip up.

You can likely set up all this automation in under a few hours sitting at your computer. That’s a small one-time investment of your time to simplify your financial life and finally have the peace of mind that your finances are on track, automatically.

Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.

About the author
Carla Fried

Carla translates business and personal finance concepts into engaging content that helps individuals make more confident choices in how they manage their money. Her work appears in The New York Times, Money Magazine, Barron's and Consumer Reports.

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